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India to introduce global tenders for coal mining blocks

Citation:Mining Technology Date:2020-1-10 14:27:16

The Indian Government has approved an ordinance to open up coal mining in the country to non-coal companies while lifting restrictions on the use of domestically mined coal.

Indian Coal and Mines Minister Prahlad Joshi said that the Union Cabinet has approved promulgation of Mineral Laws (Amendment) Ordinance 2020 to amend Mines and Minerals (Development and Regulation) Act 1957 and Coal Mines (Special Provisions) Act 2015, media sources reported.

Joshi added that following the approval, India plans to introduce global tenders for coal mining blocks and ease bidding rules in March.

The latest move is part of the country’s plans to attract foreign mining firms and reduce fossil fuel imports. It is also expected to end state-run Coal India’s near-monopoly of the fuel, reported Reuters.

The government had earlier restrained the end use of the fuel and the coal block auctions winners were only permitted to use the output for explicit purposes.

Bidders were not previously allowed to sell coal in the open market, which attracted criticism from the mineral industry saying that these restrictions discouraged bidding.

The auctions are currently aimed at attracting global miners such as Glencore, BHP Anglo American and Peabody Energy.

One of the biggest coal producers in the world, India expects to retain coal as its key energy resource as it contributes to the generation of affordable electricity.

Joshi told Reuters: “Previously there was a restriction that anybody participating in the auction should have coal mining operations in India. That restriction we are removing.”

According to the news agency, out of the 99 coal blocks auctioned since 2014, only 29 of them attracted bidders.

Joshi added that the government has amended mining laws to fast-track mining at lapsed mining leases. The new regulations will enhance the exploration and auction of precious minerals such as gold and diamond.

In a separate development, the Environment Ministry gave its clearance to ten coal mining projects with an annual capacity of 160Mtpa. Four washeries, which can handle 31Mtpa, also received clearance.

The government also approved Coal India projects involving seven mines (141Mtpa) and two washeries (15Mtpa). Overall, the ministry cleared 14 of the total 23 projects it considered.

Coal India subsidiary South Eastern Coalfields’ Kusmunda open-cast coal mine in Chhattisgarh is the largest project to receive clearance. This mine is capable of producing 62.5Mtpa when operating at full capacity.